1. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-1 Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing Chapter 1 Entrepreneurship in the New Millennium In the Spotlight: Dell Computer Corporation www.dell.com In the Spotlight: Dell Computer Corporation www.dell.com

2. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-2 Learning Objectives: Chapter 1 1. Discuss the availability of entrepreneurial opportunities and give examples of highly successful businesses started by entrepreneurs. 2. Identify three rewards and three drawbacks of entrepreneurial careers. 3. Describe the various types of entrepreneurs, entrepreneurial management styles, and entrepreneurial ventures. 4. Explain three aspects of the changing context of small business. 5. Identify three tools that provide a potential competitive edge for small entrepreneurial firms. 6. Discuss several factors that indicate a readiness for entrepreneurship.

3. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-3 Striking Success Stories Mark Dankberg, Steven Hart, and Mark Miller ViaSat Inc. Using technological expertise Carla Connor C&B Industrial Safety, Inc. Operating profitably on a small scale William Williams Glory Foods Developing a profitable niche market William Williams Glory Foods Developing a profitable niche market www.viasat.com www.gloryfoods.com

4. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-4 Entrepreneurial Incentives Rewards of Entrepreneurship Profit Freedom from the limits of standardized pay for standardized work Profit Freedom from the limits of standardized pay for standardized work Independence Freedom from supervision and rules of bureaucratic organizations Independence Freedom from supervision and rules of bureaucratic organizations Satisfying Way of Life Freedom from routine, boring, and unchallenging jobs Satisfying Way of Life Freedom from routine, boring, and unchallenging jobs

5. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-5 Drawbacks of Entrepreneurship Hard WorkHard Work Long HoursLong Hours StressStress RiskRisk

6. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-6 Entrepreneurial Characteristics 1.Need for achievement 2.Risk tolerance 3.Self-confidence 4.Enthusiasm 1.Need for achievement 2.Risk tolerance 3.Self-confidence 4.Enthusiasm

7. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-7 Three Types of Entrepreneurs 1. Founders 2. General Managers 3. Franchisees

8. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-8 Characteristics of Artisan and Opportunistic Entrepreneurs Artisan Entrepreneur 1.Technical training 2.Paternalistic approach 3.Reluctance to delegate 4.Narrow view of strategy 5.Personal sales effort 6.Short planning horizon 7. Simple record keeping Artisan Entrepreneur 1.Technical training 2.Paternalistic approach 3.Reluctance to delegate 4.Narrow view of strategy 5.Personal sales effort 6.Short planning horizon 7. Simple record keeping Opportunistic Entrepreneur 1.Broad education 2.Rational approach 3.Willing to delegate 4.Broad view of strategy 5.Diversified marketing approach 6.Longer planning horizon 7.Sophisticated accounting and financial control Opportunistic Entrepreneur 1.Broad education 2.Rational approach 3.Willing to delegate 4.Broad view of strategy 5.Diversified marketing approach 6.Longer planning horizon 7.Sophisticated accounting and financial control

9. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-9 Types of Entrepreneurial Ventures Limited returns Limited potential Substantial returns A “good living” for owner Stability Big bucks Examples: Apple Computer Nike Rapid growth Marginal firms Attractive small companies High-potential ventures

10. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-10 Three Challenges to Small Businesses 1. Growth of superstores 2. Expansion of information technology and the Internet 3. Emergence of a global economy

11. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-11 Criteria for Defining Smallness in Business Number of employees Value of assets Volume of deposits Insurance in force Sales volume

12. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-12 Examples of SBA Size Standards Sales Dollars Advertising Agencies$ 3.5 million Employment Agencies$ 3.5 million Furniture Stores$ 3.5 million General Contractors - Single family houses$17.0 million Insurance Agents, Brokers, and Services$ 3.5 million Mobile Home Dealers$ 6.5 million Radio and Television Repair Shops$ 3.5 million Radio Broadcasters$ 3.5 million Number of Employees Copper Ore Mining 500 employees Hardware Wholesaling 100 employees Meat Packing 500 employees Metal Can Manufacturing 1,000 employees

13. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-13 Applications of New Technology Financial software applicationsFinancial software applications Internet salesInternet sales E-mailE-mail TeleconferencingTeleconferencing Computer-assisted manufacturing and designComputer-assisted manufacturing and design Easy access to database information on the InternetEasy access to database information on the Internet

14. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-14 Types of Entrepreneurial Career Opportunities Opportunity Level of Risk Starting a businessHigh risk Buying a businessMedium risk Opening a franchised businessMedium risk Entering a family businessVariable risk

15. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-15 Age Concerns in Starting a Business Early Career Concerns 1.Getting an education 2.Gaining work experience 3.Acquiring financial resources Early Career Concerns 1.Getting an education 2.Gaining work experience 3.Acquiring financial resources Late Career Concerns 1.Fulfilling family responsibilities 2.Attaining seniority in employment 3. Earning investment in a retirement program Late Career Concerns 1.Fulfilling family responsibilities 2.Attaining seniority in employment 3. Earning investment in a retirement program Age 20 30 40 50

16. Small Business Management, 11th edition Longenecker, Moore, and Petty 2000 South-Western College Publishing 1-16 Entrepreneurial Refugees Foreign refugeeForeign refugee Corporate refugeeCorporate refugee Parental refugeeParental refugee Feminist refugeeFeminist refugee Housewife refugeeHousewife refugee Society refugeeSociety refugee Educational refugeeEducational refugee